RETHINKING MUSIC: A FRAMING PAPER

The Berkman Center for Internet & Society at Harvard University

INTRODUCTION
The music industry has been in a state of significant flux for more than a decade as music
consumption has shifted online. From one perspective, this shift marks the downfall of the
recording industry. Fans have little incentive to buy albums when they can instantaneously
illegally download songs from peer-to-peer file sharing networks and other sources.1 And, the
attention of consumers is increasingly drawn from music to an enormous and growing array of
competing media and entertainment products. According to an NPD group study, in the third
quarter of 2010, only 16.5% of American Internet users over the age of 13 purchased music.2
When fans do purchase music, they would rather download individual tracks priced at $.99 than
full-length albums at ten times the cost.3 As a result of all these factors and more, the value of the
global recorded music industry has declined by one-third since 2004.4
On the other hand, the digital revolution brings new opportunities for growth and innovation in
music distribution. There are now over 400 licensed digital music services worldwide, with 13
million tracks licensed for digital use.5 Since 2004, the value of the US digital music market has
increased by over 1,000% to around $4.6 billion.6 New companies, like Rdio and Mog, give
consumers an alternative to piracy by allowing them to stream the music of their choice ondemand. A large percentage of the subscription and advertising revenue from these services goes
directly into the pockets of artists, songwriters, labels, and publishers. Smaller artists, musics
new middle class, are leveraging social networking platforms to reach out to a global fan base.
Through do-it-yourself distribution tools, artists can cut out middlemen and distribute music
directly to their fans, earning more in royalties than they could have under traditional record and
publishing deals during the heyday of the compact disc.7 Some artists even raise money directly
from their fans to support the production of new music.8
To survive the digital transformation, all players in the music industry are rethinking music.
Labels are rethinking their business models. Digital companies are rethinking channels of
distribution. Artists are rethinking their relationships with fans and traditional sources of
revenue. And, lawyers, academics, and policymakers are rethinking the legal landscape in an
effort to meet the needs of creators and consumers in the digital age.
This introductory piece briefly describes the broad range of ways the music industry is reacting
to and rethinking music and copyright law and policy. The accompanying papers included in this
briefing book reflect the views of and provide additional context from a diverse range of
stakeholders on some of todays most pressing legal and policy issues.
SAMPLING, MASHUPS, AND THE EMERGENCE OF REMIX CULTURE
The intersection of music and law begins with the very creative process itself. That process is
becoming increasingly individualized, particularly when it comes to recording and distributing
music. It is now possible to produce and professional-level music recordings using only an iPad
and its GarageBand app, at a total cost of $505.9 The rise of inexpensive recording tools and

channels for self-distribution has led some musicians to avoid producers, studios, and labels.10
There may be fewer recording professionals, but anyone can record. Even more can remix.
A cursory review of popular music during the last twenty years reveals an increasing number of
widely loved works that draw on or incorporate samples of pre-existing songs and recordings.
YouTube is chock full of videos that mix and remix audio and visual elements, spawning entirely
new genres of creative expression. Our culture increasingly places an aesthetic premium on art
that incorporates and builds upon pre-existing works. The Internet has allowed for such culture
to flourish, providing the means of creation, distribution, and consumption of remixes, mashups,
and works based on samples to a wide range of networked artists and consumers.
Girl Talks All Day, a 71-minute album released to much positive attention in November 2010, is
made up entirely of 373 overlapping samples. (The album was produced on a laptop using Adobe
Audition, which sells for about $350.)11 As might be inferred from the name of his label, Illegal
Art, Girl Talks unlicensed sampling the digital copying and reuse of the source songs and
recordings may constitute copyright infringement.
Some courts have held that sampling a small portion of a song does not infringe the rights of the
composition owner.12 On the recording side, the Sixth Circuit has notably held that a sound
recording owner has the exclusive right to sample his own recording, no matter how small the
amount.13 In addition to the simplicity of a license or dont sample model advocated by the
Bridgeport court, observers have argued that a rule requiring licensing is economically efficient:
it prevents the market from being flooded with unlicensed remixes of the most popular songs,
wasting them in a scramble to use them up as quickly as possible.14 Critics find the suggestion
that fair use provides a defense to infringement in the case of samples troubling, as it provides no
revenue to rightsholders.
Samples may be used legally, by licensing sampled compositions and sound recordings from
their owners. But, samplers often find the rights clearance process to be expensive and complex,
slowing and stifling the creative process.15 Some argue this has decreased artists choice in
samples, leading them to rely on vanilla-wrap samples from sample libraries rather than on
judiciously selected vintage records.16 More problematically, there seems to be an underlying
tension between sampling culture, which savors remixes and reworkings, and current US
copyright law, which privileges originality and the singular author.17
Advocates of a more liberal approach to sampling, remixes, and mashups argue that copyright
owners may stifle creativity by refusing to license music because of a distaste for the new subject
matter, simply out of whim, or a desire to extract maximum revenues from their superior
bargaining positions.18 One proposed solution is a compulsory license for sampling. Just as
Congress has chosen to provide set licensing rates for digital audio transmissions of sound
recordings (pursuant to Section 114 of the Copyright Act) and cover versions of musical
compositions (pursuant to Section 115), advocates argue, there should set be set fees that allow
artists to sample and remix copyrighted works.19 Others prefer a liberalized fair use test that
could incentivize creative sampling to transform works.20 And, still others advocate a system of
free use, at least for certain classes of uses and users, like the creative amateur.21 No clear

route forward has emerged, but most parties agree that it is important to strike a balance between
allowing for the creativity of remixers and compensating the initial artists.
ARTISTS AND LABELS
Individual artists have historically recorded under contractual relationships with record labels.
The nature of those contractual arrangements has changed in important ways, along with the
governing law and the digital distribution landscape.
Termination of Copyright Transfers
Record companies that control content pursuant to recording agreements signed during the past
three-plus decades, a vast and enormously valuable library of recorded works, must consider the
copyright termination provisions found in Section 203 of the Copyright Act.22 When those
provisions take effect in 2013, creative artists may force labels to relinquish copyrights they have
owned and exploited for the past thirty-five years.23 Debate around Section 203 centers on two
issues: (1) whether Section 203 applies to works created after the January 1, 1978, the statutory
starting date, by artists who entered licensing agreements prior to 1978; and (2) whether sound
recordings are works-for-hire exempt from Section 203s termination requirement.
Section 203 allows artists to terminate transfers of copyright executed on or after January 1,
1978, thirty-five years after the initial grant. The artist or his heirs reacquire the copyright and
have a second opportunity to exploit it, a second bite at the apple.24 Works-for-hire are exempt
from this provision, and ownership of all associated copyrights remains with the publisher or
label. In inserting Section 203 into the 1976 Copyright Act, Congress recognized that the
difficulty of determining the long-term economic value of a work led many newer artists to enter
into disadvantageous contracts with established labels and publishers. Congress intended for this
provision to protect artists from unprofitable transfers where, due to unequal bargaining power,
the transferee reaps all the benefits of the copyright.25
Artists who executed transfers of their works in 1978 can begin to recapture their copyrights in
2013 and begin filing notices of termination this year, in 2011. Needless to say, artists and their
representatives are enthusiastic about the opportunity to regain their copyrights and exploit them
in the new digital market.26 Labels, on the other hand, want to retain control of copyrighted
recordings and hope to narrow the reach of Section 203 as much as possible.27
Controversy has arisen over the meaning of the term executed in Section 203. Representing
labels, the Recording Industry Association of America (RIAA) has argued that Congress
intended executed to mean signed.28 This reading would narrow Section 203 to apply only to
the works of artists who signed and entered into agreements after January 1, 1978.
The problem with such a reading, according to artists advocates like the Future of Music
Coalition, is that many works are created years after an agreement is signed. For example, many
artists signed agreements before 1978, but recorded songs after January 1st of that year. Those
artists would not have the benefit of termination rights under the RIAAs interpretation of
Section 203 for the works they recorded in 1978 and beyond. Some argue that Congress

expressly intended to safeguard artists from disadvantageous contracts and could not have
intended this statutory gap.29
The United States Copyright Office recently proposed a rule-making that will allow artists
caught in this gap to use the date of creation as the date of execution for the purposes of
terminating transfer agreements.30 The Copyright Office has not otherwise clarified the meaning
of the term executed. This means that post-1978 artists who enter into transfer agreements
before creating the works at issue can try to start the 35-year term with the earlier signing date .31
Labels are also trying to limit the effects of Section 203 by arguing that most sound recordings
are works-for-hire, which are expressly exempt from the termination right. The Copyright Act
classifies a creation as a work-for-hire if it: (1) is prepared by an employee in the ordinary scope
of her employment; or (2) is specially commissioned for use in a contribution to a collective
work, a part of a motion picture or other audiovisual work, a translation, a supplementary work, a
compilation, an instructional text, a test, answer material for a test, and an atlas.32 There is
general agreement that artists are not true employees of record labels and that the first prong does
not apply, but the second prong is controversial.
Most traditional recording contracts state that all recordings made pursuant thereto constitute
works-for-hire. By law, however, a sound recording is a work-for-hire only if it fits into one of
the above-enumerated categories, leading labels to classify sound recordings as either
contributions to collective works or compilations.33 Sound recordings briefly were included as an
enumerated category after an amendment tacked onto the Satellite Home Viewer Improvement
Act of 1999 attracted little notice, but upon discovery of this major change protests
prompted Congress to retroactively repeal the amendment.34 Artists representatives counter that
collective works and compilations refer only to albums that contain recordings from a
variety of artists, not albums created entirely by one artist and delivered as a whole to the label.35
The Copyright Office has taken the middle ground. According to Marybeth Peters, former
Register of Copyrights, the work-for-hire doctrine encompasses everyone involved in a recording
except for the key performers, who should retain their Section 203 transfer termination transfer
rights.36 In the coming years, labels will receive their first notices and likely move the debate to
the courts, bringing eventual clarification.
Performance Rights and Sound Recordings
Increased public performance rights for sound recording rightsholders may provide another new
revenue stream for artists and labels. Composers are entitled to receive royalties each time a
related recording is publicly performed by being broadcast on terrestrial radio or played in bars,
stores, or other public places. Rightsholders in sound recordings, including performers and
record labels, are left out for now. During the 112th Congress, Representative John Conyers and
Senator Patrick Leahy will likely reintroduce a version of the Performance Rights Act, which
would extend public performance rights for sound recordings to terrestrial radio.37
In 1995, Congress elected to extend the public performance right to sound recordings, but only
when they are performed by means of digital audio transmission (i.e., on satellite radio and
Internet streams). Representative Howard Berman failed in 2007-2008 to expand the sound
recording public performance right, but Senator Patrick Leahy revived the effort in 2009 to

create a royalty for music played on AM and FM radio and cap the annual royalty payments of
smaller radio stations. Despite passing both the House and Senate Judiciary Committees, the Act
was not brought before the full House or Senate for a vote.38
The National Association of Broadcasters (NAB) has opposed expanded performance rights
legislation for sound recordings, calling it a performance tax on radio.39 According to NAB,
radio play is free advertising, and the music industry earns substantial revenues as a direct result
of this free promotion.40 NAB has attempted unsuccessfully to craft its own legislative solution.
Under the NAB proposal, a terrestrial broadcast radio station would pay artists and sound
recording rightsholders between .25% and 1% of the stations net revenues. The royalty
percentage would be directly linked to the penetration of radio chip-enabled cell phones in the
market. Once radio capable cell phones reached 75% market penetration, broadcasters would pay
the full 1% performance royalty.
MusicFirst, a coalition of twelve affiliated sound recording organizations, rejected the NAB
plan.41 They argued that digital transmissions are increasingly important in promoting songs and
breaking new artists, making a special treatment for terrestrial radio unwarranted, especially
when broadcast stations regularly play older songs that need little additional promotion. The US
Department of Commerce, among others, has emphasized that the United States stands alone
among industrialized nations in maintaining its public performance right exemption for sound
recordings. By not complying with international copyright standards, the United States is
depriving US artists of a significant revenue stream. Because of the lack of reciprocity, foreign
countries will not pay US artists and labels public performance royalties for sound recordings,
keeping tens of millions of dollars annually from artists.42
Some, including Rep. Conyers and musician George Clinton, frame the debate as a civil rights
issue. Older, largely African-American performers whose songs are regularly played on the radio
are receiving no compensation for their work while wealthy broadcasters profit.43 Other
supporters of the Performance Rights Act believe that maintaining the terrestrial radio exemption
conflicts with the historic rationale of US Copyright law: the encouragement of individual effort
by personal gain. As music industry revenues decline in the digital age, artists must be able to
capitalize on all available revenue streams to receive the personal gain that motivates creation.
The terrestrial radio exemption shuts down one significant incentive.44
The NAB responds that the labels are only pushing for sound recording performance rights
because they are losing compact disc sales revenue. The Performance Rights Act punishes
commercially successful broadcasters for the labels flawed business model, they argue. Failing
labels will be saved by forcing many local broadcasters, which provide the public news and
entertainment, out of business because they cant afford to pay the sound recording royalties.45
ANTI-PIRACY AND RIGHTS ENFORCEMENT ISSUES ONLINE
Rightsholders efforts to enforce their copyrights in the face of technological innovation have
pushed and defined the boundaries of copyright law. From seminal cases on secondary copyright
infringement liability involving proprietors of flea markets to the Supreme Courts foray into the
world of file-sharing in Grokster, courts have struggled to balance the interests of content owners

and the innovators who build businesses that rely on their content. Policymakers face these same
considerations when crafting legislative solutions to these complex problems.
Viacom v. YouTube and the DMCA
The Digital Millennium Copyright Act (DMCA) was enacted in 1998 in part to bring the
United States in line with two treaties negotiated under the auspices of the World Intellectual
Property Organization. It affects the music industry in three significant ways: (1) the DMCA
criminalized both the production of technology meant to circumvent digital rights management
technology and the act of circumvention itself; (2) the DMCA raised the penalties for copyright
infringement on the Internet; and (3) the DMCA created safe harbors for Internet service
providers faced with claims of copyright infringement based on content uploaded by users.
The safe harbor provisions of the DMCA are, in the eyes of many observers, essential for the rise
and legal security of services like YouTube that rely heavily on user-generated content. If a
service provider complies with a variety of statutory obligations, including responding
expeditiously to properly-framed takedown notices and preventing repeat infringement, it will
not be liable for infringing content posted by its users.46
The service provider may not have actual knowledge of infringing material or be aware of
facts or circumstances from which infringing activity is apparent.47 Just what constitutes
requisite knowledge or awareness, however, is still a subject of some debate.
In June 2010, in a suit filed by Viacom, a federal district court held that YouTube was not liable
for infringing content posted by its users.48 While YouTube was aware that some content on its
site infringed on others copyright, it was not obligated to remove that content without direct
notice of infringement. The issue has now the subject of an appeal before the Second Circuit, and
both parties have filed their initial briefs.49
The decision has divided commentators. Some view it as improperly burdening rightsholders by
requiring them to identify each and every piece of infringing content, allowing services like
YouTube to profit in complicity with infringers.50 Others view it as an important step in
safeguarding a space for innovators to develop new media business models online without fear of
secondary liability for copyright infringement.51 Either way, the ruling and ongoing appeal are
sure to affect rightsholders doing business online or seeking to stop online infringement.
Independent of Viacom, much criticism has been leveled at the DMCA. President Clinton signed
it into law with the express purpose of balancing rights protection and safety for online services,
but both sides have claimed the shorter end of the stick. When a rightsholder wishes to send a
takedown notice, it must certify that the notice is directed at infringing material, not, for
example, material that would be covered by the fair use doctrine. Some critics have argued that
the fear of being charged with bad faith prevents rightsholders from exercising their takedown
options.52 Others argue the exact opposite: overzealous rightsholders file takedown notices that
result in legitimate works being removed from the Internet, stifling creativity.53 Such a takedown
process could create a system of censorship by proxy.54 Suffice it to say, the DMCA safe harbor
remains a battleground for copyright litigation, scholarship, and potential legal reform.

Investor Liability
Investment is key to innovation in the online world. Investors provide needed capital, giving
those who develop online content delivery mechanisms the financial wherewithal to foster and
grow their businesses and meet the demands of consumers. But investors in services that violate
copyright laws are appealing legal targets for rightsholders seeking compensation for use of their
content. Recent litigation has helped to define the scope of investor liability.
In 2007, Bertelsmann AG paid $130 million to publishing affiliates of the Harry Fox Agency to
settle a class action suit alleging that Bertelsmann was liable for direct or secondary copyright
infringement due to its investment in Napster.55 A pair of recent district court opinions, UMG v.
Veoh I56 and II,57 has made it more difficult for rightsholders to go after investors in companies
that facilitate copyright infringement. Current law provides two theories of investor liability for
copyright infringement: (1) contributory infringement; and (2) vicarious infringement. Under the
first theory, an investor is liable if he (a) has knowledge of the infringing conduct and (b)
induces, causes, or materially contributes to the infringing conduct.58 The Veoh II court held that
merely funding a company did not equate to materially contributing its users copyright
infringement, ruling out contributory infringement.59
The Veoh court also found UMGs vicarious infringement liability arguments unpersuasive.
Under the vicarious infringement theory, an investor is liable if he (a) had the right and ability to
supervise the infringing activity and (b) had an obvious and direct financial interest in such
activities. UMG argued that investors had a direct financial interest in Veohs users uploading
of infringing content: the more users who watched the infringing content, the more ad
impressions Veoh could sell, and the more revenue and profits Veoh would generate for its
investors. The court found that investors reap returns only from their sale of stock in Veoh,
creating a financial interest only in the stock price, not in the sale of ad impressions.60
This is problematic if the recording industry looks to recover lost revenue via litigation, as
investors tend to have deeper pockets than the typical lightly capitalized startup. It will now be
difficult to go after investors for copyright infringement without evidence of their involvement in
a companys day-to-day operations.61 Still, Veoh is only a district court opinion that other courts
may find persuasive, but need not follow. Some scholars want change in the opposite direction:
they say the statutory copyright law itself should be amended to give investors a more
predictable sense of potential liabilities. Otherwise, investors may let the prospect of litigation
deter them from funding the new digital music companies.62
Statutory Damages and the Copyright Act
Copyright law allows copyright owners to recover actual damages they can prove or statutory
damages between $750 and $30,000 per infringed work and up to $150,000 per work for
"willful" infringement.63 Copyright owners may also recover their costs of litigation as well as
reasonable attorneys fees.64 Certainly, these statutory damages create the potential of high costs
for defendants and thus are a useful tool for copyright holders to enforce their rights.
Some courts and critics, though, believe they are too high. For example, in March, a court
rejected a theory of statutory damages that would have made Limewire liable for over a billion

dollars in statutory damages, an award that is more money than the entire music recording
industry has made since Edison's invention of the phonograph in 1877.65 Likewise, an ongoing
appeal in the First Circuit seeks to change the way statutory damages are assessed by juries in
lawsuits against individual users of peer-to-peer file-sharing services.66 Additionally, many
observers argue that the risk of such high damages may chill expression,67 even expression by
well-intentioned speakers who would otherwise be protected by fair use defenses.
The Role of ISPs in Rights Enforcement
The recording industry has increasingly pressed for Internet Service Providers (ISPs) to adopt
graduated response programs to assist in combating copyright infringement that occurs over their
networks. Under a graduated response program, rightsholders identify for ISPs the IP addresses
of infringing users and provide ISPs with evidence of infringement. ISPs then take a series of
escalating responses, beginning typically with warnings. If a users IP address is flagged a
second time, the ISP reduces the users bandwidth. A third strike may lead to termination of the
users account.68
Supporters of graduated response programs tout their efficiency.69 As the gatekeepers of Internet
access, ISPs can most easily stop persistent infringers by slowing or terminating their accounts.
In contrast, rights enforcement via individual lawsuits is costly and fails to deter. Rightsholders
do not have the resources to prosecute all infringers, so many Internet users do not fear being
caught and will continue to infringe.70
Some governments require ISPs to adopt graduated response programs. In 2007, France created
an independent agency, HADOPI, responsible for enforcing a three-strike graduated response
program. Each time a rightsholder files a claim of copyright infringement, the relevant ISP must
hand over the offending users IP address and send a warning email notice to the infringing user.
If there is a second offense within six months of the first warning, the ISP must send a certified
warning letter to the users home. After the third offense, the ISP must suspend the users
Internet connection for a period from two months to one year. In 2009, Frances highest court
struck down the third step of the law for violating citizens basic civil right to Internet access.
The modified third step now requires judicial review prior to termination of Internet access.71
In contrast, the United Kingdoms Digital Economy Act, enacted in April 2010, imposes less
responsibility and costs on ISPs. Rightsholders track the IP addresses of infringers and pass them
along to ISPs, who are responsible for sending warning notices to the infringing users. ISPs are
required to give rightsholders lists of users who have reached a certain level of infringement.
Rightsholders then have the discretion to file suits against the infringers. ISPs will absorb only
25% of the costs of this process; rightsholders will absorb the remaining 75%. If this program
fails to reduce total UK online copyright infringement by 70% or more, however, ISPs may have
to implement technical solutions to limit specific users frequent infringement.72
In the United States, record companies are lobbying for similar graduated response programs.
Currently, some ISPs are cooperating with rightsholders on notice programs where ISPs send
infringing users warning notices. But, ISPs have pushed back against adopting more stringent
regulation, like Frances three-strikes law. It is not in an ISPs interest to terminate the accounts
of paying customers.73

The Anti-Counterfeiting Trade Agreement (ACTA) an international, multilateral

intellectual property trade agreement may require the United States to adopt graduated
response regulations. Leaked early drafts drew criticism for explicitly requiring them. While the
October 2010 final draft does not expressly mention a graduated response, it does contain broad
language encouraging ISPs to use fair and proportionate remedies to enforce copyright laws.
Some organizations argue that this language implies a graduated response requirement.74
Many critics have focused their attacks on three-strikes programs that terminate persistent
infringers Internet access, like Frances HADOPI, for imposing a punishment disproportionate
to the crime of infringement as Internet access is increasingly important for basic economic and
social activities. Moreover, say critics, termination reaches too broadly as a punishment,
affecting entire households and not just individual infringers. Other critics worry that these
programs place too much enforcement power in the hands of ISPs and would prefer a system that
gives consumers recourse if they feel they have been wrongfully accused of infringement.75
Some detractors attack the economic efficiency of graduated response programs. They argue that
the ISPs will pass the costs of sending notices and ensuring they are received on to the
consumers, making it more difficult for low-income families to afford Internet access.76
Government-Sanctioned Rights Enforcement Measures
US senators have promised to introduce legislation targeting rogue websites facilitating illegal
file sharing and other methods of copyright infringement, similar to last years failed Combating
Online Infringement and Counterfeits Act (COICA).77 The Obama Administration is also
drafting new proposals to combat digital piracy.78
COICA cracks down on foreign websites that traffic in counterfeit and stolen American
intellectual property. The bill authorizes the US attorney general to target any domain name of a
website that is primarily designed to infringe copyrights and serves no other commercially
significant purpose79 and require the register of the domain to suspend its operation. The bill
would also require the Department of Justice to compose and issue a blacklist of domain names
dedicated to infringing activities. The DOJ could then issue court orders requiring ISPs, search
engines, payment processors, and online advertising networks to stop servicing these rogue
websites.
Critics of COICA object to the bill as authorizing Internet censorship, creating a blacklist
without judicial review, and potentially undermining freed speech when targeted domains
contain blogs or discussion boards. There is also concern that COICA will hurt US credibility in
foreign policy by making the US appear hypocritical when criticizing Internet censorship while
itself blocking foreign domain names. Other countries may feel more justified and emboldened
to block websites if they see the US doing the same.80 The ISPs also argue COICA is overbroad
and would overburden service providers.81
The major music labels have joined members of the film, television, fashion, and software
industries in supporting COICA. They contend that these rogue websites will be impossible to
stop if search or advertising companies like Google and payment processors like Visa can
continue to do business with them and provide them with the tools to thrive financially. 82

LAW, POLICY, AND DIGITAL MUSIC DELIVERY

Perhaps no aspect of the music industry has changed so radically or so quickly during the past
decade as the means of distributing music to consumers. Large chain music stores like Tower
Records have shut their doors, electronics and big-box retailers are shrinking shelf space devoted
to compact discs, and distributors of music at all levels have radically re-tooled their
manufacturing and supply chains to deliver to an ever-increasing variety of digital services.83
Meanwhile, consumer consumption has changed, increasing demand for singles and moving
away from ownership of physical (and even digital) recordings in favor of subscription services
and web-based radio. These transformations prompt re-evaluation and re-consideration of
fundamental aspects of our copyright laws.
Music in the Cloud
As broadband and high-speed mobile networks proliferate, consumers are increasingly turning to
the cloud to store and stream their music to home and portable devices. Both Apple and Google
are rumored to be getting into the cloud-based music space, following numerous younger
entrants. The goal is a system of anytime, anywhere access to music stored not on a users
device, but on the servers of a third party. Such a system allows for more control over the
distribution of content as well as, ideally, access by consumers to a wide range of music. Less
than a month ago, Amazon joined the race to the cloud with its Cloud Drive and Cloud Player
services.84 Beginning in the early 2000s, however, legal issues emerged, highlighting challenges
surrounding intellectual property rights and cloud-based storage and delivery systems.
In January 2000, MP3.com launched My.MP3.com, which allowed users to register their
personal CDs, either in their personal computers or purchase through retail affiliates, then stream
the albums from a website. MP3.com argued that because it acted as a personalized music locker,
allowing users to listen only to music they had registered, it was merely storing the CDs.85
Record companies commenced a lawsuit, arguing that MP3.com created unlicensed copies of
CDs.86 The court agreed, holding that a so-called space shift (i.e., allowing listeners access to
their music from any Internet-connected location), would not qualify MP3.com for a fair use
defense in the same way that the time shifting capabilities of VCR taping did for Sony.87
MP3Tunes, launched in 2006 by MP3.com founder Michael Robertson, allows users to upload
music from their computers or sideload music from the web. EMI and others are suing for
infringement, but Google has joined the fray to revive the argument that space shifting is a
legitimate fair use.88 This argument received extra support in the form of Amazons new cloud
service, which Amazon launched without obtaining licenses from the major labels. Instead, the
company has asserted that its service is like any number of existing media management
applications.89 We do not need a license to make Cloud Player available. The legal validity of
this argument remains to be seen.
In 2008, the Second Circuit held that copies produced in and streamed from a remote digital
video recorder system were made lawfully by the customers, and temporary (1.2-second) copies
made for buffering were not infringing copies.90 As such, playing back the videos did not violate
the copyright owners rights to publicly perform their works. Views of this holding are mixed.
Some observers see it as as an end-run around copyright liability.91 Others, like Google, see it

10

as laying the groundwork for personal transmissions from and storage in the cloud, something
[c]onceptually no different than what users do when they store music purchased on CDs on
their personal computer hard drives, or on their iPods or other digital music players.92
The law in this area is far from settled. The Supreme Court denied certiorari in part because then
Solicitor General Elena Kagan argued that the Second Circuits case was the first among many
potential similar cases in an evolving technology. She specifically singled out music lockering
and [t]he general development of cloud computingmay generate similar issues.93 Now
Justice Kagan may ultimately be forced to revisit the matter.94
Internet Radio and Statutory License Rates
While locker services store and transmit users music, other services simply stream music, for
free or on a subscription basis, to users regardless of an initial a la carte purchase. These services
include Rhapsody (which has licensed a large number of works to stream as subscribers choose),
Pandora (which serves as a free radio station streaming licensed music according to its own
algorithms), and Hype Machine (which aggregates music from blogs posted around the world).
All are frequently referred to as Internet radio or music streaming services. For purposes of the
law, though, they must be divided between interactive and non-interactive services.
In order to offer the former, providers must negotiate individual licenses with sound recording
copyright holders. Non-interactive services, on the other hand, require only that providers pay
compulsory license fees to SoundExchange at rates (and pursuant to license terms) set by
statute.95
Many observers believe the compulsory license rates are too high for webcasters, particularly
when compared to the disproportionately low rates charged satellite broadcasters (and outright
exemption for terrestrial radio stations).96 Rightsholders counter that statutory fees are reasonable
to compensate those involved in the creation of sound recordings and administer the statutory
licensing regime.97
Section 115 Reform
Digital music services struggle to offer catalogs of songs large enough to attract consumers. One
key obstacle in the music clearance process is Section 115 of the Copyright Act, which governs
compulsory licensing of the composition rights of nondramatic musical works. Section 115
contains byzantine procedural requirements, requiring extensive documentation for each
individual song that a service would like to distribute.98
Critics of Section 115 argue that these high transaction costs discourage investment in new
digital music services.99 Services also complain that it can be torturous locating the rightsholders
that they are required to notify.100 Additionally, advocates of reform hope that a new version of
the law will clarify ambiguities affecting digital services, such as whether incidental buffer or
cache copies stored in a server during streams require a separate Section 115 license in addition
to a public performance license.101

11

Labels, publishers, and songwriter representatives also support Section115 reform, criticizing the
compulsory license provision for no longer fulfilling its purpose of making musical compositions
readily available.102 A 2006 attempt at reform failed, however, partially because of disagreement
between music industry representatives and digital music advocates over the industrys
insistence on licensing incidental buffer copies of songs. Some, like the Electronic Frontier
Foundation and Public Knowledge, argue that such copies fall under fair use. If digital music
services had to pay an additional royalty for these copies, they would either struggle to survive or
pass on the extra costs to consumers. In either case, consumers looking for new ways to legally
listen to music online would suffer.103 On the other side, songwriter and publisher representatives
argue that buffer copies have intrinsic economic value.104 Unlicensed, they give value to digital
music services without providing any corresponding benefit to copyright owners. Without this
revenue stream, songwriters will continue to struggle to support their art.105
COLLECTIVE LICENSING AND ALTERNATIVE COMPENSATION
With new entrants chomping at the bit to find ways to use music in a complex rights landscape,
and with rightsholders open to an increasing array of business models, non-traditional modes of
compensating creators and rightsholders may become key. Some argue that rightsholders should
be open to voluntary collective licensing regimes that cut through the complexity of license
negotiations by offering users access to a wide range of content at pre-established rates. Others
go further, arguing that a more radical policy shift away from a copyright system that allows
one-off, piecemeal licensing through mechanisms controlled by rightsholders and toward a
system that allows a wide range of content uses supported by taxes will strike the balance
between compensating creators and promoting innovation in music delivery.
Voluntary Collective Licensing
Voluntary collective licensing regimes generally work within the confines of current copyright
laws and keep rightsholders in control.
The Electronic Frontier Foundation advocates an all-you-can eat subscription for users licensed
voluntarily by music industry collecting societies.106 The distinction from the tax-based plan
described below is that artists choose to enter the society and may opt to license some works
individually, and listeners choose whether or not to pay the collectively negotiated rate. In that
way, according to the EFF, the project is much like traditional terrestrial radio broadcast.107
Such a solution will necessarily involve small groups of stakeholders organizing licensing and
pricing and, therefore, may come into conflict with antitrust laws. In spite of the fact that one
major advantage claimed by collective licensing advocates is the lack of government control,
some regulation will be necessary to prevent abuse. There currently exist three major
performance rights organizations on the composition side (i.e., ASCAP, BMI, and SESAC) and
one major performance rights organization on the sound recording side (i.e., SoundExchange) in
the United States. Some see that fact as enough to provide competition. Others see potential for
either an antitrust exception or antitrust regulation.108 Regardless, some observers point to a
slippery slope leading from voluntary licensing schemes to government intervention and
mandatory regimes.109 For example, if an ISP seeks to acquire rights on behalf of all of its
customers, creating a collective to bargain on each side, the lack of ISP competition in many

12

areas may make participation essentially mandatory: if an individual wants Internet access, he
must also buy all the music that the ISP thinks he wants.110 Such an arrangement would likely
lead to government scrutiny, at the very least.
Alternative Compensation Models and Taxation
Governments can supply public goods themselves, pay private actors to produce those goods,
issue post-hoc rewards to incentivize that production, protect those producers from competition,
or assist private individuals to create technology that helps make their goods more excludable.
Copyright law takes the fourth track by stopping third parties from copying or performing artists'
works. Professor William Fisher argues in his book, Promises to Keep, that taking the second
path through tax-supported music may better promote the interests of a broad range of
stakeholders.111 Beyond providing reliable compensation to artists in an environment otherwise
susceptible to theft or piracy, a tax-based alternative compensation scheme may lower costs to
music consumers; flatten the costs to access works, which may lead to more variety in
consumption; decrease costs of litigation; and, maybe most importantly, promote an environment
unlike our current reality where a significant number of an artists audience are criminals
engaged in piracy.112 Professor Neal Netanel offers a similar proposal, limited to a
noncommercial use levy on peer-to-peer-related goods and services rather than Fishers more
general tax.113
Resistance to a tax-supported music industry has emerged on all sides.114 Many fear a world
where government subsidizes and registers art. Critics also suggest that promoting a set source
and level of revenue may stifle innovation115 and that any organizer would have to overcome
technical and global challenges of abuse116 and comply with existing rights frameworks.117
At least one country is pushing forward with an alternative compensation scheme. In Brazil, the
Ministry of Culture is prepared to introduce an Internet Sharing License that would give
Brazilian ISP users the freedom to share published works in exchange for a collected levy.
NET NEUTRALITY
Many artists and providers of digital music have advocated vigorously for the adoption of net
neutrality rules that would prevent ISPs and telecom companies from blocking their access to
listeners online.118 Although the Federal Communications Commission has moved to implement
new net neutrality rules, many are unsatisfied with the Commissions efforts.119
Net neutrality is the idea that the Internet should treat all information and content delivered
through it equally.120 For example, a user should be able to access a niche music blog like
Pitchfork.com and a large music store like iTunes at the same bandwidth speeds. On the other
side, advocates of net neutrality argue that an ISP, like Comcast, should not be allowed to strike
an exclusive distribution deal with a large online radio conglomerate like Clear Channel and
prevent its subscribers, who rely on Comcast as their exclusive means of Internet access, from
accessing Pandora.121
Many artists and digital music companies believe that FCC rules codifying the net neutrality
principles are vital for artistic creation to thrive. The Internet enables artists to skip the
gatekeepers and directly reach their fans. Music aficionados can more easily find and explore
13

new categories of music. This means that smaller, regional artists or niche musicians (say a
zydeco accordion player) can create distributed, global fan bases that will result in increased
revenue opportunities. Likewise, many companies like Pandora or Rhapsody have
leveraged the Internet to create new models for consuming music. But, for small artists and
innovative digital companies to thrive, equal access to online listeners is essential. These smaller
artists and cash-strapped startups would likely be unable to afford to pay ISPs for prioritized
access while major labels could absorb the cost as part of promotion. Consequently, audiences
may not be able to find David with Goliath in their way.122
Many larger rightsholders like the labels, publishers, and performance rights organizations
also support net neutrality to the extent that the principles do not apply to digital piracy.123 These
organizations believe that ISPs should be allowed to throttle down or prohibit access to filesharing services and sites primarily designed to infringe copyrights.
Opponents of net neutrality rules contend that this regulation will constrict ISPs flexibility to
adopt traffic prioritization strategies needed to manage their networks and guarantee working
service for their customers. Some fear that consumers will ultimately suffer, as ISPs will require
them to pay for faster networks or larger bandwidth uses.124
On December 21, 2010, the FCC promulgated open Internet rules, codifying the principles of
transparency, no-blocking, anti-discrimination, and reasonable network management. The rules
apply only to lawful content, so ISPs may still block digital piracy as discussed above.125
These rules, however, pose two problems for the digital music. First, the full rules do not apply
to wireless Internet.126 In the case of digital music services, this means that carriers like Verizon
or AT&T can provide prioritized access to select music content providers and block access to
other music services. This is especially problematic for the digital music industry, where many
consumers access services primarily through mobile devices. Without net neutrality rules in
place for mobile Internet, new services like the cloud-based music lockers discussed above may
struggle to get off the ground.
Second, the net neutrality rules permit ISPs to offer content-neutral, use-agnostic discrimination.
This means that ISPs can offer subscribers differently priced bandwidth plans and allocations.127
These plans may not directly discriminate against content providers, but some network neutrality
advocates fear that users will self-discriminate. To avoid going over their bandwidth allocations,
users are unlikely to try new, bandwidth-heavy streaming music services. Without users, these
services cannot survive, and creative new business models for the music industry may be killed
in their infancies by ISP policies.
CONCLUSION
This brief look at just some of the issues facing the creators, distributors, and consumers of
music is intended to serve as a broad overview of the key policy questions of the day. Many
more will be explored over the course of the Rethink Music Conference.
At the heart of many of the controversies addressed in this framing paper and, indeed, in all of
the submissions to this briefing book lies the same tension between balancing the interests and

14

rights of those involved in creating music and fostering innovation and progress in the means and
media of music delivery and consumption. A key takeaway is that the law and policy
surrounding the creation, delivery, and consumption of music are in flux as stakeholders rethink
how to protect copyright while innovating new models for distributing and experiencing music.
Because technology and accompanying new business models will continue to evolve faster than
the law, this state of flux is here to stay. Artists, labels, entrepreneurs, lawyers and policymakers
will always be rethinking music.

See IFPI DIGITAL MUSIC REPORT 2011: MUSIC AT THE TOUCH OF A BUTTON (2011), available at
http://www.ifpi.org/content/library/DMR2011.pdf.
2
IFPI DIGITAL MUSIC REPORT 2011, supra note 1.
3
See Eric Pfanner, Music Industry Counts the Cost of Piracy, N.Y. TIMES, Jan. 21, 2010,
available at http://www.nytimes.com/2010/01/22/business/global/22music.html.
4
Id.
5
Id.
6
Id.
7
See Leah Belsky, Byron Kahr, Max Berkelhammer, and Yochai Benkler, Everything in Its
Right Place: Social Cooperation and Artist Compensation, 17 MICH. TELECOMM. TECH. L. REV.
1, 8 (2010).
8
Id., at 1516.
9
Brian X. Cheh, Indie Musicians Record Entire Album with GarageBand for iPad, WIRED:
GADGET LAB (April 4, 2011), http://www.wired.com/gadgetlab/2011/04/indie-band-ipad/.
10
Nathan Olivarez-Giles, Recording Studios Are Being Left Out of the Mix, LOS ANGELES TIMES
(Oct. 13, 2009), http://articles.latimes.com/2009/oct/13/business/fi-smallbiz-studios13
11
See Mike Levine, Girl Talk Talks Tech, ELECTRONIC MUSICIAN (April 1, 2011),
http://emusician.com/interviews/feature/girl_talk/.
12
See Newton v. Diamond, 349 F.3d 591 (9th Cir. 2003).
13
Bridgeport Music, Inc. v. Dimension Films, 410 F.3d 792, 801 (6th Cir. 2005).
14
Robert M. Szymanski, Audio Pastiche: Digital Sampling, Intermediate Copying, Fair Use, 3
UCLA ENT. L. REV. 271, 322 (1996).
15
See Jim Ayre, Girl Talk and the Sample License Clearance Process, FUTURE OF MUSIC
COALITION (Aug. 28, 2008), http://futureofmusic.org/blog/2008/08/28/girl-talk-and-samplelicense-clearance-process.
16
NEIL NETANEL, COPYRIGHTS PARADOX, 22 (2008).
17
See Olufunmilayo B. Arewa, From F.C. Bach to Hip Hop: Musical Borrowing, Copyright, and
Cultural Context, 84 N.C.L. REV. 547, 581 (discussing courts characterization of sampling as
stealing as opposed to hip hops of borrowing).
18
Jeremy Beck, Music Composition, Sound Recordings and Digital Sampling in the 21st
Century: A Legislative and Legal Framework to Balance Competing Interests, 13 UCLA ENT. L.
REV. 1, 19 (2005).
19
See Joshua Crum, The Day the (Digital) Music Died: Bridgeport, Sampling Infringement, and
a Proposed Middle Ground, 2008 BYU L. REV. 943 (2008).

15

20

See David Mongillo, The Girl Talk Dilemma: Can Copyright Law Accommodate New Forms
of Sample-Based Music? 9 PGH. J. TECH. L. & POL'Y 1 (2009).
21
LAWRENCE LESSIG, REMIX, 255 (2008).
22
See 17. U.S.C. 203 (2006).
23
Id.
24
Letter from Future of Music Coalition to Maria Pallante, Register of Copyright, US Copyright
Office
(Jan.
24,
2011),
available
at
http://futureofmusic.org/sites/default/files/FutureofMusicNoticeTerminationComments.pdf.
[hereinafter, Future of Music Coalition Letter].
25
Sound Recordings as Works Made for Hire: Hearing Before the H. Sub. Comm. On Courts
and Intellectual Property, 106th Congress (2000) (statement of Marybeth Peters, the Register of
Copyrights) [hereinafter, Peters Sound Recordings Statement].
26
Future of Music Coalition Letter, supra note 18.
27
See Anne Gilliland, Recording Termination of Transfer Notices in Gap Situations,
COPYRIGHT CORNER (Dec. 3, 2010), http://library.osu.edu/blogs/copyright/2010/12/03/recordingtermination-of-transfer-notices-in-gap-situations.
28
Recording Industry Association of America, Inc., Reply Comments of the Recording Industry
Association of America, Before the United States Copyright Office, (2010).
29
Future of Music Coalition Letter, supra note 18.
30
Id.
31
Id.
32
Chris Horsnell, Sound Recordings and the Termination of Transfers, MUSIC ROW MAGAZINE,
Aug. 1 2005, available at http://www.mjhc-law.com/articles/sound-recordings-and-thetermination-of-transfers.
33
Peters Sound Recording Statement, supra note 19.
34
See Mary LaFrance, Authorship and Termination Rights in Sound Recordings, 75 S. CAL. L.
REV. 375, 376 (2002).
35
Horsnell, supra note 26.
36
Peters Sound Recording Statement, supra note 19.
37
Brooks Boliek, Performance Rights Act on repeat, POLITICO (Feb. 10, 2011, 4:45 AM)
http://www.politico.com/news/stories/0211/49194.html.
38
The Performance Rights Act Puts Local Jobs at Risk, NAB: NATIONAL ASSOCIATION OF
BROADCASTERS, http://www.nab.org/advocacy/issue.asp?id=1889&issueid=1002 (last visited
Mar. 10, 2011).
39
STOP THE RADIO TAX, NAB: NATIONAL ASSOCIATION OF BROADCASTERS,
http://www.noperformancetax.org/ (last visited Mar. 31, 2011).
40
The Performance Rights Act Puts Local Jobs at Risk, supra note 32.
41
David Oxenford, NAB Radio Board Adopts Proposal for Settlement of Performance Tax
Issue Where Do We Go From Here?, BROADCAST LAW BLOG (Oct. 25, 2010),
http://www.broadcastlawblog.com/2010/10/articles/broadcast-performance-royalty/nab-radioboard-adopts-proposal-for-settlement-of-performance-tax-issue-where-do-we-go-from-here.
42
Letter from Cameron F. Kerry, General Counsel, U.S. Department of Commerce, to Sen.
Patrick Leahy, Chairman, Committee on the Judiciary, United States Senate (Apr. 1, 2010),
available
at
http://www.scribd.com/doc/29299229/Commerce-Department-Letter-onPerformance-Rights-Act; Public Performance Right for Sound Recordings, FUTURE OF MUSIC

16

COALITION,
http://futureofmusic.org/article/fact-sheet/public-performance-right-soundrecordings (last visited Apr. 5, 2011).
43
Gary Myers & George Howard, The Future of Music: Reconfiguring Public Performance
Rights, 17 J. INTELL. PROP. L. 207, 241-42 (2010).
44
See Id.
45
The Performance Rights Act Puts Local Jobs at Risk, supra note 32.
46
See 17 U.S.C. 512(c).
47
Id.
48
Viacom Int'l, Inc. v. YouTube, Inc., 718 F. Supp. 2d 514 (S.D.N.Y. 2010)
49
Eriq Gardner, Google Answers Viacom in YouTube Appeal (Exclusive), THE HOLLYWOOD
REPORTER (April 1, 2011), http://www.hollywoodreporter.com/thr-esq/google-answers-viacomyoutube-appeal-173922.
50
E.g., Cory L. Andrews, Viacom V. Youtube: The Rest of the Story, FORBES (Jun. 25, 2010,
11:38 AM), http://blogs.forbes.com/docket/2010/06/25/youtube-v-viacom-the-rest-of-the-story/.
51
E.g., David Post, Viacom v Youtube, and Why it Matters:, The Volokh Conspiracy (July 19,
2010, 11:34 AM), http://volokh.com/2010/07/19/viacom-v-youtube-and-why-it-matters/.
52
Note, Lets Not Go Crazy: Why Lenz V. Universal Music Corp. Undermines the Notice and
Takedown Process of the Digital Millennium Copyright Act, 17 J. INTELL. PROP. L. 147 (2009).
53
Charles W. Hazelwood Jr., Fair Use and the Takedown/Put Back Provisions of the Digital
Millennium Copyright Act, 50 IDEA 307 (2010).
54
Wendy Seltzer, Free Speech Unmoored in Copyrights Safe Harbor: Chilling Effects of the
DMCA on the First Amendment, 24 HARV. J.L & TECH. 171 (2010).
55
Susan Butler, Pubs, Bertie Reach $130M Settlement Over Napster, BILLBOARD.BIZ (Aug. 31,
2007)
http://www.billboard.biz/bbbiz/content_display/industry/news/e3id5f1fc9043fb8e12af8d727d2a5
f8c2a.
56
Veoh Networks v. UMG Recordings, Inc. (Veoh I), 522 F. Supp. 2d 1265 (S.D. Cal. 2007).
57
UMG Recordings, Inc. v. Veoh Networks, Inc. (Veoh II), 620 F. Supp. 2d 1081 (C.D. Cal.
2008).
58
Liz Brodzinski, UMG Recordings, Inc. v. Veoh Networks, Inc.: The Future of Investor
Liability for User-Generated Content, 21 DePaul J. Art, Tech. & Intell. Prop. L. 75, 76-77
(2010).
59
Veoh II at 12-13.
60
Id.
61
See Brodzinski, supra note 51, at 100.
62
Id.
63
17 U.S.C. 504(c)(1-2).
64
17 U.S.C. 505.
65
Arista Records LLC v. Lime Group LLC, No. 06 CV 5936 (KMW), 2011 WL 832172, at *3
(S.D.N.Y. Mar. 10, 2011) (quoting Def. Mem. at 2-3).
66
Joey Seiler, Nesson, Students File Appeal in File-Sharing Case, HARVARD LAW RECORD (Jan.
31, 2011, 11:01 AM), http://www.hlrecord.org/news/nesson-students-file-appeal-in-file-sharingcase-1.1949907.
67
Derek E. Bambauer, Faulty Math: The Economics of Legalizing The Grey Album, 59 ALA. L.
REV. 345, 350 (2008).

17

68

See Barry Sookman and Dan Glover, Graduated Response and copyright: an idea that is right
for the times, THE LAWYERS WEEKLY, Jan. 20, 2010.
69
See Charn Wing Wan, Three strikes law: a least cost solution to rampant online piracy, 5 J.
INTELL. PROP. L. & PRAC. 232-244 (2010); Olivier Bomsel & Heritana Ranaivoson, Decreasing
Copyright Enforcement Costs: The Scope of a Graduated Response, 6 REV. ECON. RES.
COPYRIGHT ISSUES 13-29 (2009).
70
See Sookman and Glover, supra note 61.
71
Chris Naoum, A Bat for Three Strikes, FUTURE OF MUSIC COALITION (Nov. 12, 2010, 2:03
PM) http://futureofmusic.org/blog/2010/11/12/bat-three-strikes.
72
Id.
73
See Steven Seidenberg, The Record Business Blues, 96-JUN A.B.A. J. 54, 55-56 (2010).
74
See, e.g. Monica Horten, Final ACTA puts Europe under more pressure for graduated
(Oct.
6,
2010,
10:23
PM)
response,
IPTEGRITY.COM
http://www.iptegrity.com/index.php?option=com_content&task=view&id=569&Itemid=9.
75
See Seidenberg, supra note 66, at 59.
76
See Id. at 59.
77
Grant Gross, Senators explore Web site seizure options, COMPUTERWORLD (Feb. 16, 2011,
3:28
PM)
http://www.computerworld.com/s/article/9209864/Senators_explore_Web_site_seizure_options.
78
Declan McCullagh, White House will propose new digital copyright laws, CNET NEWS (Feb. 7,
2011, 10:11 PM) http://news.cnet.com/8301-31921_3-20030956-281.html.
79
IP Enforcement and the State of the Net, FUTURE OF MUSIC COALITION (Jan. 18, 2011, 5:37
PM) http://futureofmusic.org/blog/2011/01/18/ip-enforcement-and-state-net
80
See Gautham Nagesh, Advocacy group slams online-piracy bill as censorship, THE HILL (Sept.
22, 2010, 9:30 AM) http://thehill.com/blogs/hillicon-valley/technology/120211-eff-slams-onlinepiracy-bill-as-censorship.
81
See Gross, supra note 70.
82
See Letter from EMI, Sony Music Entertainment, Universal Music Group, Warner Music
Group, et al., to Patrick Leahy, Chairman Committee on the Judiciary, United States Senate (Oct.
21,
2010),
available
at
http://image.exct.net/lib/fee913797d6303/m/1/101021_MultiIndustry_S3804_CombatingOnlineI
nfringementandCounterfeitsAct_Leahy.pdf.
83
Best Buy, for example, announced in its 2010 Q3 earnings call that it would shrink shelf space
for CDs to make way for higher margin products, like games and e-readers. Alexandra Osorio,
Best Buy Shrinking Holiday Shelf Space for CDs, DIGITAL MUSIC NEWS (Sept. 16, 2010),
http://www.digitalmusicnews.com/stories/091610bestbuy.
84
Press Release, Amazon.com, Inc., Introducing Amazon Cloud Drive, Amazon Cloud Player
for Web, and Amazon Cloud Player for Android (Mar. 29, 2011), available at
http://phx.corporate-ir.net/phoenix.zhtml?c=176060&p=irolnewsArticle&ID=1543596&highlight=.
85
UMG Recordings v. Mp3.com, Inc., 92 F. Supp. 2d 349, 350 (S.D.N.Y. 2000).
86
Id.
87
See Id. at 351.

18

88

Brief for Google Inc. as Amicus Curiae Supporting Defendants, Capitol Records et al. v.
MP3Tunes, LLC, et al., No. 07 Civ. 9931 (S.D.N.Y Jan. 3, 2011), available at
http://www.scribd.com/doc/46686475/Google-Amicus-Brief.
89
Jacqui Cheng, Amazon on Cloud Player: we don't need no stinkin' licenses, ARS TECHNICA
(March 30, 2011), http://arstechnica.com/media/news/2011/03/amazon-on-cloud-player-wedont-need-no-stinkin-licenses.ars.
90
Cartoon Network LP, LLLP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008)
91
Comment, Cartoon Network LP, LLLP v. CSC Holdings, Inc., 54 N.Y.L. SCH. L. REV. 585,
587 (2010).
92
Google Amicus Brief, supra note 81, at 13.
93
Brief for the United States as Amicus Curiae, Cable News Network, Inc., et al., v. CSC
Holdings, Inc., et al., No. 08-448, n. 3 (2d Cir. 2008), available at
http://latimesblogs.latimes.com/files/cablevision-09-05-29osg-brief.pdf.
94
For a general overview of legal issues in cloud computing, see Fernando M. Pinguelo and
Bradford W. Muller, Avoid the Rainy Day: Survey of U.S. Cloud Computing Caselaw, 2011 B.C.
Intell. Prop. & Tech. F. 11101 (2011).
95
Roughly, an interactive service allows users to request specific songs or a specially created
program. 17 USCS 114(j)(7). However, the definitions are muddy. See Arista Records, LLC v.
Launch Media, Inc., 578 F.3d 148 (2d Cir. 2009) (holding that Yahoos LAUNCHcast service
was non-interactive because its playlists, while customizable, did not create predictable programs
for listeners).
96
Jessica L. Bagdanov, Internet Radio Disparity: The Need for Greater Equity in the Copyright
Royalty Payment Structure, 14 Chap. L. Rev. 135, 154 (2010). The author also provides an
excellent overview of the differing rates levied against different sizes of webcasters.
97
See Digital Performance Right in Sound Recordings and Ephemeral Recordings, 37 C.F.R.
380 (2010), available at http://federalregister.gov/a/2010-23264.
98
See Whitney Broussard, The Promise and Peril of Collective Licensing, 17 JOURNAL OF
INTELLECTUAL PROPERTY LAW 1, 24 (2009).
99
Id.
100
Music Licensing Reform: Hearing Before the H. Sub. Comm. On Courts, the Internet and
Intellectual Property, 109th Congress (2005) (statement of Marybeth Peters, the Register of
Copyrights).
101
Id.
102
Id.
103
Gigi Sohn, Now the Fun Starts: Music Licensing, Orphan Works, and the Copyright
Modernization Act of 2006, PUBLIC KNOWLEDGE (Sep. 11, 2006, 12:56 PM)
http://www.publicknowledge.org/node/622; Fred von Lohmann, Season of Bad Laws, Part 4:
Music Services Sell Out Fair Use, ELECTRONIC FRONTIER FOUNDATION (Jun. 6, 2006)
https://www.eff.org/deeplinks/2006/06/season-bad-laws-part-4-music-services-sell-out-fair-use.
104
See The Section 115 Reform Act of 2006: Hearing Before the H. Sub. Comm. On Courts, the
Internet and Intellectual Property, 109th Congress (2005) (statement of Rick Carnes, President of
the Songwriters Guild of America).
105
Id.

19

106

See Fred Von Lohman, A Better Way Forward: Voluntary Collective Licensing of Music File
Sharing, ELECTRONIC FRONTIER FOUNDATION, Apr. 30, 2008, available at
https://www.eff.org/wp/better-way-forward-voluntary-collective-licensing-music-file-sharing.
107
Id.
108
Id.
109
Ed Felten, The Slippery Slope from Voluntary to Mandatory, CENTER FOR INFORMATION
TECHNOLOGY POLICY, PRINCETON UNIVERSITY (Apr. 9, 2008, 11:12 AM),
http://citp.princeton.edu/symposium/?p=31.
110
Id.
111
WILLIAM W. FISHER III, PROMISES TO KEEP: TECHNOLOGY, LAW, AND THE FUTURE OF
ENTERTAINMENT (2004).
112
William W. Fisher, III, et al., Copyright & Privacy Through the Wide-Angle Lens, 4 J.
MARSHALL REV. INTELL. PROP. L. 285, 290 (2005).
113
Neal Netanel, Impose a Noncommercial Use Levy to Allow Free Peer-to-Peer File Sharing,
17 HARV. J.L & TECH 1 (2003).
114
See Michael Arrington, The Music Industrys New Extortion Scheme, TECHCRUNCH (Mar. 27,
2008), http://techcrunch.com/2008/03/27/the-music-industrys-new-extortion-scheme/.
115
Michael Arrington, The Music Industrys Last Stand Will Be A Music Tax, TECHCRUNCH
(Jan. 10, 2008), http://techcrunch.com/2008/01/10/the-music-industrys-last-stand-will-be-amusic-tax/.
116
John Palfrey, Alternative Compensation Systems for Digital Media, JOHN PALFREY, FROM THE
BERKMAN CENTER AT HARVARD LAW SCHOOL, http://blogs.law.harvard.edu/palfrey/alternativecompensation-systems-for-digital-media/.
117
See Volker Grassmuck, The World Is Going Flat (-Rate), INTELLECTUAL PROPERTY WATCH
(May 11, 2009), http://www.ip-watch.org/weblog/2009/05/11/the-world-is-going-flat-rate/#study
(suggesting that tax-based systems in Europe may comply with existing law).
118
See Shane Wagman, I Want My MP3: Legal and Policy Barriers to a Legitimate Digital
Music Marketplace, 17 J. INTELL. PROP. L. 95, 111 (2009).
119
See Bruce Houghton, FCC Net Neutrality Rules Could Deliver Major Blow to Music Tech &
New Music Industry, HYPEBOT.COM (Dec. 2, 2010).
120
Tim Wu, Network Neutrality FAQ, http://www.timwu.org/network_neutrality.html.
121
Id.
122
See Shane Wagman, I Want My MP3: Legal and Policy Barriers to a Legitimate Digital
Music Marketplace, 17 J. INTELL. PROP. L. 95, 111 (2009).
123
The Google-Verizon Internet Pact, MUSIC NOTES BLOG (Aug. 11, 2010),
http://www.riaa.com/blog.php?content_selector=Internet_Pact.
124
Faith Fried, FCCs Net Neutrality Stance Draws Praise, Criticism, CENTER FOR STRATEGIC
AND INTERNATIONAL STUDIES, http://csis.org/blog/fcc%E2%80%99s-net-neutrality-stancedraws-praise-criticism (last visited Apr. 4, 2010).
125
Kyle Bylin, Overview: Newly Adopted FCC Net Neutrality Rules, HYPEBOT.COM (Dec. 21,
2010).
126
See Future of Music Coalition, Rock the Net: The Future of the Open Internet,
http://futureofmusic.org/issues/campaigns/rock-net.
127
See Id.

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